A view of Sydney’s Avon dam, one of the city’s main drinking water catchments.
Photograph: Peter Harrison/Getty Images

Coalmining in Sydney’s drinking water catchment will be scrutinised by water experts, the New South Wales Department of Planning and Environment has announced.

Enviroment groups, which have been warning for years of the impact of coalmining on drinking water welcomed the move but called for a moratorium on any expansion of mining activity until the conclusion of the review.

The department announced that a new independent expert panel on mining in Sydney’s drinking water catchment would be established, and headed by the yet-to-be appointed NSW chief scientist and engineer. In the interim, emeritus professor Jim Galvin will be the acting chairman.

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The deputy secretary of planning services at the Department of Planning and Environment, Marcus Ray, said the panel would provide advice to the government on mining operations in protected areas near Sydney’s main water catchments such as the Avon, Cordeaux, Cataract and Woronora dams.

The panel has been directed to consider recommendations from an audit conducted last year, which warned: “The cumulative, and possibly accelerated, impact of mining on flow regimes in the catchment is likely linked to the increased prevalence of the current longwall methods of underground mining.”

The Cordeaux dam supplies water to Camden, Campbelltown and Wollondilly council areas via the Macarthur water filtration plant. Photograph: Peta Jade/Getty Images

The terms of reference include providing advice on specific proposals for expansion at the Russell Vale, Dendrobium, Metropolitan and Wongawilli mines.

“There are proposals for a significant expansion of coal mining under the catchment special areas,” said the Lock the Gate Alliance NSW coordinator, Georgina Woods.

“Consideration of these project must be halted while the panel considers the long-term damage these operations are inflicting on Sydney’s catchment and water security.

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“This is the time to choose. Do we want to safeguard Sydney’s drinking water, or let it be jeopardised for more coal mining?”

The Coolong Foundation, which has campaigned on the issue for years, while welcoming the move, said Ray was wrong in declaring that mining had taken place so far without any big impact on water supply.

“There clearly have been significant impacts, if major impacts include the drying out of upland swamps and streams due to widespread cracking of surface rocks,” the director of the Coolong Foundation for Wilderness, Keith Muir, said. “So the department needs independent advice on what should define ‘major impacts’.

“I encourage the independent expert panel to get lots of exercise walking the areas that have been mined. Too often inquiries become mired in expert reports, when the truth is out there in what should be our pristine drinking water catchments.”